Massachusetts State Regulations & NAIC Insurance Law
Licensing
Any individual applying for a Massachusetts resident producer’s license must be at least 18 years old and must be a resident of Massachusetts before submitting an application.
Pre-licensing course and exam
Massachusetts does not have specific pre-licensing requirements, but an applicant must pass the examinations for the lines of authority applied for; the Division of Insurance recommends, but does not require, a course of study before the examination (Mass. Gen. Laws ch. 175, § 162L).
Fingerprints/background check
The Commissioner reviews an applicant’s background before issuing a license, and many states require applicants to submit fingerprints for a state and FBI criminal history check as part of the application.
Controlled business
Controlled business is insurance written on the producer’s own life, property or interests, or on those of the producer’s family, employer or a business the producer controls. A producer may insure themselves and their family, but a license exists to sell insurance to the public, so states generally restrict obtaining or using a license principally to write controlled business.
Non-resident license
A producer licensed in another state can obtain a Massachusetts nonresident license without taking Massachusetts’s examination. Under Massachusetts law, a nonresident receives the license if the person (Mass. Gen. Laws ch. 175, § 162N(a)):
- Is currently licensed as a resident, and in good standing, in the home state
- Has applied (the home-state application or the Uniform Application) and paid the fees
- Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)
A producer who moves to another state files a change of address, with certification from the new home state, within 30 days; no fee or application is required (Mass. Gen. Laws ch. 175, § 162N(c)). A licensed producer who moves to Massachusetts applies for a resident license within 90 days and does not repeat prelicensing education or the examination for lines already held, unless the Commissioner determines otherwise by regulation (Mass. Gen. Laws ch. 175, § 162O(b)).
Temporary license
Most states allow the insurance regulator to issue a temporary license, without an examination, when one is needed to keep an insurance business serviced. Typical cases are:
- The surviving spouse or personal representative of a producer who dies or becomes disabled, to allow time to sell the business or train new people
- A member or employee of a business entity producer, on the death or disability of its designated producer
- The designee of a producer entering active military service
The regulator may limit what a temporary licensee may do and may require a licensed sponsor who takes responsibility for the temporary licensee’s acts.
Massachusetts may issue a temporary producer license for up to 180 days without an examination, where it is necessary to service an insurance business — for example after a licensed producer dies or becomes disabled (Mass. Gen. Laws ch. 175, § 162Q(a)). The Commissioner may also issue one in any other circumstance where the public interest will best be served by it (Mass. Gen. Laws ch. 175, § 162Q(a)(4)).
Military service
A producer who cannot comply with license renewal procedures because of military service or another extenuating circumstance may request a waiver of those procedures, and of any examination, fine or sanction for not complying (Mass. Gen. Laws ch. 175, § 162M(d)).
Renewal and reinstatement
A producer license stays in effect only while the producer renews it on schedule: paying the renewal fee and completing continuing education by the due date.
Each state sets its own renewal cycle.
A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.
In Massachusetts, an individual producer may reinstate a lapsed license without an examination within 12 months of the renewal fee due date, for a penalty of double the unpaid renewal fee (Mass. Gen. Laws ch. 175, § 162M(c)).
Continuing education
All states, including Massachusetts, have continuing education requirements that must be met to renew any major lines (life, health, property, liability) insurance license. Many states also require continuing education of other licensees, such as adjusters or title or bail bond agents, while exempting producers who hold only certain limited lines; each state’s law says which. Individuals licensed in Massachusetts must complete 60 hours of approved instruction before their first license renewal, and 45 hours for each subsequent 36-month renewal period. Three of those hours must be Massachusetts Approved Ethics (MAE), counted within the total rather than in addition to it. The hours may be earned in any line of insurance the producer is licensed for.
Notice of change of name or address
Licensees inform the Commissioner of a change of address within 30 days of the change (Mass. Gen. Laws ch. 175, § 162M(f)).
A producer reports to the Commissioner within 30 days any administrative action taken in another jurisdiction or by another governmental agency in Massachusetts, counted from the final disposition, and any criminal prosecution, counted from the initial pretrial hearing date (Mass. Gen. Laws ch. 175, § 162V). A producer must notify the Commissioner before using any name other than the producer’s legal name (§ 162P).
Company regulations
An insurance company must be authorized by the Division of Insurance to conduct business in Massachusetts. To receive a certificate of authority, the company applies to the Commissioner and files its charter or articles of incorporation, financial statements showing that it meets the state’s capital and surplus requirements, and the other documents and fees the state requires.
Capital and surplus requirement
A company authorized to conduct insurance business in Massachusetts must meet minimum corporate standards. The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required. In Massachusetts, the Commissioner must revoke the license of a foreign company whose capital has been reduced below the required amount (Mass. Gen. Laws ch. 175, § 5), while a domestic stock company other than a life company whose capital is impaired by a quarter or more is first given three months to make it good (ch. 175, § 6).
Medigap policies
Federal law standardizes Medicare supplement (Medigap) policies into lettered plans, but it lets the Secretary waive that standardization for a state that had its own simplification program in place on November 5, 1990 (42 U.S.C. § 1395ss(p)(6)). Massachusetts has its own plans: the only Medicare supplement options that may be issued in Massachusetts are the Medicare Supplement Core, Medicare Supplement 1 and (since January 1, 2020) Medicare Supplement 1A plans, and no other options may be issued on or after January 1, 2006 (211 CMR 71.08(2)). The lettered plans are not sold in Massachusetts. Every issuer must offer the Core plan (211 CMR 71.08(7)), and Supplement 1 may not be offered to anyone who becomes Medicare-eligible on or after January 1, 2020 (211 CMR 71.08(2)(b)).
All three Massachusetts plans include the same basic benefits: the Part A hospital copayments for days 61–90 and 91–150, 365 additional lifetime hospital days paid in full, the Part B coinsurance (in most cases 20% of the approved amount) and the first 3 pints of blood. Supplements 1 and 1A add the Part A deductible, skilled nursing facility coinsurance for days 21–100 and foreign travel coverage; only Supplement 1 covers the Part B deductible (Division of Insurance, Medicare Supplement Plans Offered in Massachusetts 2026).
The insurer gives the applicant the outline of coverage when the application is presented, and the Guide to Health Insurance for People with Medicare, with its Massachusetts attachment, at the time of application, and obtains an acknowledgment of receipt of each; a direct response insurer delivers the Guide on request, and no later than delivery of the policy (211 CMR 71.13(1)(b); 211 CMR 40.15(1)).
Duties of the commissioner of insurance
The Massachusetts Commissioner of Insurance is the head of the Division of Insurance, which is part of the Massachusetts Office of Consumer Affairs and Business Regulation (OCABR). The Division of Insurance regulates the insurance industry and protects consumers. The Commissioner of Insurance is appointed by, and serves at the pleasure of, the Governor.
The Commissioner is responsible for establishing and enforcing regulations in the Massachusetts insurance market in a manner that protects consumers and encourages economic development.
Those duties include:
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Investigate all claims and complaints of legal violations relating to insurance.
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If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.
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Monitor transactions of all companies including domestic, foreign, and alien insurance companies.
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Examine the financial condition of insurers; the NAIC’s model examination law calls for every insurer to be examined at least once every five years. Massachusetts examines each domestic company, and any foreign company applying for admission or already admitted to do business in the commonwealth, at least once in every five years (Mass. Gen. Laws ch. 175, § 4(2)).
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Audit the books and records of any resident producer as frequently as necessary.
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Collect all fees associated with producers and insurers.
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Determine and administer fines associated with violations for insurers and producers.
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Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.
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Review the policy forms and rates insurers file; property and casualty rates under chapter 175A are filed at least 15 days before use (Mass. Gen. Laws ch. 175A, § 6(a)), while some health contracts and rates need approval (ch. 176A, § 6).
Suspend, revoke or non-renew
The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:
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Providing false information on the application for an insurance license.
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Omitting any relevant information on an application that would have disqualified the individual from being eligible to receive a license.
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Being found guilty of a violation or the noncompliance of insurance regulations and laws…
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Committing fraud while attempting to obtain an insurance license.
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Improperly withholding, misappropriating or converting any money or property received in the course of doing insurance business.
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Providing false information in reference to the terms and conditions of an insurance contract.
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Having been convicted of a felony.
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Having admitted or been found to have committed any insurance unfair trade practice or fraud.
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Having engaged in activities of a fraudulent nature which allowed the person to involve themselves in dishonest, coercive, untrustworthy, and financially irresponsible practices.
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Having had a prior insurance license revoked or suspended in a state other than Massachusetts.
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Using another person’s identity and forging their name on an insurance application.
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Being found guilty of using unethical practices or cheating on an examination for an insurance license.
Cease and desist
If the Commissioner finds that a producer has violated the state’s insurance laws, the Commissioner may order the producer to cease and desist. A cease and desist order does not suspend or revoke the recipient’s registration, but it does require the recipient to stop or limit the activity addressed in the order.
Hearing and penalties
A person facing action by the Commissioner is entitled to notice and an opportunity for a hearing, within time limits set by Massachusetts law, and may ask a court to review the final order. In Massachusetts, unfair practice charges come with a notice of a hearing set at least 21 days after service; only after the hearing may the Commissioner order the person to cease and desist, fine up to $1,000 for each act or practice, and suspend the license, or revoke it for repeated violations (Mass. Gen. Laws ch. 176D, §§ 6, 7). The person may petition the Supreme Judicial Court for review within 30 days of service of the order (ch. 176D, § 8). Under the producer licensing law, having admitted or been found to have committed any insurance unfair trade practice or fraud is itself a ground on which the Commissioner may place a producer’s license on probation, or suspend, revoke or refuse to renew it (Mass. Gen. Laws ch. 175, § 162R(a)(7)).
A violation of the insurance laws can bring a civil penalty in addition to action against a license. In Massachusetts, the chapter 176D fine is up to $1,000 for each act or practice (Mass. Gen. Laws ch. 176D, § 7), and violating a final cease and desist order costs up to $10,000 for each violation (§ 10). Some violations are also crimes.
Unfair claims settlement practices
In Massachusetts, chapter 176D, § 3(9) defines each of the following acts or omissions as an unfair claim settlement practice (Mass. Gen. Laws ch. 176D, § 3(9)).
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The intentional obstruction and delay of claims payment or the delay of a claims investigation is a violation of regulation.
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Neglecting to provide a prompt response and written explanation of insurance policy terms, conditions, and laws related to the contract are examples of unfair claims settlement practices.
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Refusing to pay claims without conducting a reasonable investigation based upon all available information.
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Attempting to settle claims on the basis of an application that was altered without the insured’s notice, knowledge or consent.
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Attempting to settle a claim for less than the amount a reasonable person would have believed he was entitled to from the advertising material that accompanied or was part of the application.
Policy forms
Insurers file their policy forms with the Commissioner.
Depending on the line of insurance and the form, a state may require approval before a form is used, often with a period after which a filing that has not been acted on is deemed approved, or may allow the form to be used as soon as it is filed (“file and use”). In Massachusetts, a policy form may not be delivered to more than fifty policyholders until it has been on file with the Commissioner for 30 days, unless approved sooner, and not if the Commissioner objects within those 30 days (Mass. Gen. Laws ch. 175, § 2B). For life insurance there is no fifty-policyholder threshold: no life or endowment policy or annuity contract may be issued or delivered in Massachusetts until its form has been on file with the Commissioner for 30 days, unless the Commissioner approves it in writing sooner (Mass. Gen. Laws ch. 175, § 132). An individual accident and sickness policy, with its table of rates, must be on file with the Commissioner for at least 30 days before it is delivered to any person in Massachusetts, unless the Commissioner approves it in writing sooner (Mass. Gen. Laws ch. 175, § 108(2)(a)).
If a policy provision conflicts with Massachusetts law, the policy is read as amended to conform to the law.
The interest rate an insurer may charge on a life insurance policy loan is also limited by state law.
Record maintenance
A producer keeps records of each transaction (the policies placed, the insureds, the premiums received and any changes) and makes them available for the Commissioner’s inspection.
Fraudulent producer representation
A person who is not licensed as an insurance agent, broker or adjuster but holds himself out to the public as one, by advertisements, cards, circulars, letterheads, signs or other methods, may be fined $10 to $100 (Mass. Gen. Laws ch. 175, § 175). This includes any public communication, such as advertisements, letterheads, circulars, business cards, and other methods of representation.
A producer found guilty of conducting business in Massachusetts in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked.
Misrepresentation
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Misrepresentation involving the creation or distribution of policies, quotes, and illustrations designed to provide inaccurate information about the terms and conditions of a policy is prohibited. Under Massachusetts law, the test is whether the estimate, illustration, circular or statement misrepresents the policy’s benefits, advantages, conditions or terms (Mass. Gen. Laws ch. 176D, § 3(1)).
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Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.
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Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting).
False advertising
Making, publishing or circulating an advertisement, announcement or statement about the business of insurance that is untrue, deceptive or misleading is an unfair trade practice under Massachusetts law (Mass. Gen. Laws ch. 176D, § 3(2)). The medium does not matter: the rule reaches newspapers, magazines, radio and television, and also notices, circulars, pamphlets, letters, posters and any other way of placing the statement before the public. The Massachusetts test is whether the statement is untrue, deceptive or misleading.
Defamation
Defamation is an unfair trade practice under Massachusetts law: making, publishing or circulating, or aiding or encouraging, a statement that is false, or maliciously critical of or derogatory to the financial condition of any person, and calculated to injure that person (Mass. Gen. Laws ch. 176D, § 3(3)). Spreading an untrue rumor that a competing insurer is about to fail is the classic example.
Boycott, coercion and intimidation
Entering into an agreement to commit, or by concerted action committing, any act of boycott, coercion or intimidation that results or tends to result in unreasonable restraint of, or monopoly in, the business of insurance is prohibited.
False financial statements
Knowingly filing with a public official, or circulating, a false material statement of fact about a person’s financial condition, or knowingly making a false entry of a material fact in a book, report or statement, is an unfair practice (Mass. Gen. Laws ch. 176D, § 3(5)). Making false or fraudulent statements on an application to obtain a fee, commission or other benefit is a separate one (§ 3(11)).
Illegal inducements
Offering anything of value not specified in the policy (money, a service, a favor or a gift) as an inducement to buy insurance is prohibited unless state law expressly allows it, and any agreement made as part of the sale must be written into the policy.
States differ on promotional gifts. The NAIC’s model act lets producers and insurers give customers non-cash gifts, meals or charitable donations up to an amount the state considers reasonable, as long as the gift is not conditioned on buying or renewing a policy and is offered without unfair discrimination. Each state sets its own limit. Massachusetts sets no dollar limit: an insurer, agent or broker may not give or offer anything of value not specified in the policy in connection with placing, negotiating or renewing it (Mass. Gen. Laws ch. 175, § 182).
Unfair discrimination
Unfair discrimination is treating people or risks that present the same hazard differently. Massachusetts law prohibits (Mass. Gen. Laws ch. 176D, § 3(7)):
- Unfair discrimination between individuals of the same class and equal expectation of life in life insurance and annuity rates, dividends, benefits or terms
- Unfair discrimination between individuals of the same class and essentially the same hazard in health insurance premiums, benefits or terms
The NAIC’s model act, on which state unfair trade practices laws are based, also prohibits:
- Refusing, limiting or canceling coverage because of a person’s sex, marital status, race, religion or national origin
- In property and casualty insurance, refusing or limiting coverage solely because of a risk’s geographic location, unless sound underwriting and actuarial principles justify it, or solely because the applicant or insured is physically or mentally impaired
Many states also expressly forbid refusing or limiting coverage solely because a person is blind or partially blind. In Massachusetts, the rule covers every kind of policy: an insurer may not discriminate in issuing a policy or in its rates solely because of blindness or partial blindness, an intellectual disability or a physical impairment, unless the distinction rests on sound actuarial principles or actual experience (Mass. Gen. Laws ch. 175, § 193T).
Errors & omissions
Errors & Omissions (E&O) insurance is a type of professional liability insurance that protects insurance agents if they are sued for negligent performance of their duties. E&O covers negligence and unintentional mistakes that cause financial harm to clients. It does not cover intentional misconduct, criminal acts, or regulatory fines.
Children covered as dependents
Under the Affordable Care Act, a plan that offers dependent coverage must make it available to an adult child until age 26, whether or not the child is married, a student or financially dependent on the parent.
In Massachusetts, a policy that provides hospital and surgical expense insurance and dependent coverage must cover a newborn from the moment of birth. An adopted child is covered from the date the petition to adopt is filed if the child has been living in the home as a foster child, and otherwise from the date of placement for adoption. If a specific premium is required for the child, the policy may require notice of the birth, filing or placement and payment of the premium; submitting a claim can count as the notice (Mass. Gen. Laws ch. 175, § 47C). Coverage continues without regard to age for a dependent who is mentally or physically incapable of earning their own living due to disability (Mass. Gen. Laws ch. 176A, § 8BB; ch. 176B, § 4BB; ch. 176G, § 4T; ch. 175, § 110(P)). Under an individual policy, the insurer must receive proof of the incapacity within 31 days of the date coverage would otherwise end (ch. 175, § 108(2)(a)(3)).
Rebating
Massachusetts licensed producers are prohibited from directly or indirectly giving any refund, discount, favor, or credit to reduce premiums to induce the purchase of insurance.
Sharing commission
The splitting or sharing of commissions with a licensed producer is allowed. Both parties must be licensed in the line of business in which the proposed commission is to be split. In Massachusetts, no one may pay an unlicensed person for acting as a producer, but a licensed producer or business entity producer may pay its unlicensed employees referral fees for customers they refer (Mass. Gen. Laws ch. 175, § 177).
Twisting
Making a misrepresentation, or an incomplete or misleading comparison of policies, to induce a policyholder to lapse, forfeit or surrender a policy is a violation of the law (Mass. Gen. Laws ch. 175, § 181). Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information are prohibited.
In Massachusetts, twisting (a misrepresentation or misleading comparison made to induce a policyholder to lapse, forfeit, surrender, convert or exchange a policy) is a crime punishable by a fine of up to $1,000 or up to six months in prison (Mass. Gen. Laws ch. 175, § 181). A false or maliciously critical statement about a competing insurer’s finances, made to injure it, is defamation.
Unfair marketing practices
The Division of Insurance is responsible for establishing minimum standards for the full and fair disclosure of policy content. The Division also requires the standardization and simplification of the terms used to describe insurance coverage. Advertising may not involve the following:
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Any statement or implication that a policy has been approved, or that an insurer’s financial condition has been examined and found satisfactory, by a government agency. For accident and sickness insurance, Massachusetts bars this whether or not it is true (Mass. Gen. Laws ch. 175, § 110E(13)).
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Any statement or implication that a policy or insurer has been approved or endorsed by an individual, group, society, association or other organization, unless that is the fact (ch. 175, § 110E(14)).
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Any statements regarding advertising that are false or untrue in reference to the time frame in which claims are paid.
Gramm-Leach Bliley Act (GLBA)
This law repealed the parts of the Glass-Steagall Act of 1933 that kept commercial banks and securities firms apart, and allowed the consolidation of commercial banks, investment institutions and insurance companies. GLBA established a framework of responsibilities for federal and state regulators for these financial industries. It permits financial services companies to merge and engage in a variety of new business activities, including insurance, while attempting to address the regulatory issues raised by such combinations.
McCarran-Ferguson Act
Federal law signed in 1945 in which Congress declared that the insurance industry would be regulated at the state level. Grants insurers a limited exemption from federal antitrust legislation. Since 2021 the exemption does not cover the business of health insurance, apart from narrow activities such as sharing historical loss data (15 U.S.C. § 1013(c)).
National Association of Insurance Commissioners (NAIC)
The U.S. standard-setting and regulatory support organization is created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.
Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA, 15 U.S.C. 1681) regulates consumer reporting agencies and the use of consumer reports, such as credit reports, MIB records and investigative reports, including in insurance underwriting.
- When an insurer requests an investigative consumer report, it must disclose that to the consumer within 3 days of the request
- When an insurer takes adverse action based on a consumer report, it must notify the consumer and identify the reporting agency. The consumer then has 60 days to request a free copy of the report and may dispute inaccurate information
Privacy Act of 1974
The federal Privacy Act of 1974 governs how federal agencies handle personal information. It does not apply to private insurers. An insurer’s use of an applicant’s personal information is governed by the FCRA, the Gramm-Leach-Bliley Act and state insurance privacy law.
In states that adopted the NAIC’s Insurance Information and Privacy Protection Model Act, an authorization to collect personal information signed with an application is valid for no more than 30 months for life, health or disability insurance and one year for property or casualty insurance. Massachusetts adopted the model for life, health and disability insurance only (Mass. Gen. Laws ch. 175I, § 2), where an authorization signed with an application is valid for no more than 30 months (ch. 175I, § 6).
For life, health and disability insurance, Massachusetts follows the model: a person told of an adverse underwriting decision may ask in writing, within 90 business days of the notice, for the specific reasons, which must be given within 21 business days of the request (Mass. Gen. Laws ch. 175I, § 10(b)).
Telemarketing
The National Do Not Call Registry is a list of telephone numbers whose owners do not want to receive telemarketing calls. Telemarketers may not call registered numbers without the person’s permission or an established business relationship, and unsolicited sales calls:
- May be made only between 8 a.m. and 9 p.m. in the recipient’s local time under federal rules; Massachusetts’s own law is narrower, barring an unsolicited sales call received between 8 p.m. and 8 a.m. local time at the consumer’s location (Mass. Gen. Laws ch. 159C, § 3)
- Must disclose the caller’s identity, the company the caller represents and that the purpose is a sale
CAN-SPAM
A commercial email must:
- Be identified clearly as an advertisement
- Carry accurate header information and a subject line that is not deceptive
- Include the sender’s valid physical postal address
- Offer a way to opt out, and the sender must honor an opt-out within 10 business days
Life and health insurance guaranty association
Every state has a life and health insurance guaranty association that protects policyholders and beneficiaries when a member insurer becomes insolvent, by continuing coverage and paying covered claims under life insurance, health insurance and annuity contracts, up to limits set by law. Insurers licensed to write the covered lines in the state must belong to it as a condition of doing business there, and it is funded by assessments on its members.
The Massachusetts Life and Health Insurance Guaranty Association pays, for any one life, no more than $300,000 in life insurance death benefits, of which no more than $100,000 in net cash surrender and withdrawal values; $250,000 in the present value of annuity benefits; $300,000 for disability income insurance and $300,000 for long-term care insurance; $500,000 for basic hospital, medical-surgical or major medical expense insurance; and $100,000 for other health insurance coverage. It is not obligated to cover more than $300,000 in all for any one life, or $500,000 where those medical expense benefits are involved (Mass. Gen. Laws ch. 175, § 146B).
MassHealth
Although Medicaid is a federal program, states often use different names for their state-run Medicaid programs. In Massachusetts, Medicaid is called MassHealth (Mass. Gen. Laws ch. 118E, § 9A). For exam purposes, MassHealth and Medicaid are interchangeable terms.
MassHealth is a state-administered health care program for those in financial need. It is funded by federal and state money.